Latest Sign of Softening Labor Market Emerges

US jobless claim applications jumped to their highest level in almost four years last week, reports the AP, the latest sign that the labor market is softening. The number of Americans filing for unemployment benefits for the week ending Sept. 6 rose 27,000 to 263,000, the Labor Department reported Thursday. That's the most filings since the week of Oct. 23, 2021, and well above the 231,000 new applications that economists forecast. Weekly applications for jobless benefits are considered a proxy for layoffs and have mostly settled in a historically low range between 200,000 and 250,000 since the US began to emerge from the COVID-19 pandemic nearly four years ago.

Despite last week's increase, layoffs remain relatively low by historical measures and hiring has weakened, a trend that economists describe as "no hire, no fire." Earlier this week, the Bureau of Labor Statistics issued a massive preliminary revision of US job gains for the 12 months ending in March, further evidence that the labor market hasn't been as strong as previously thought. The BLS' revised figures showed that US employers added 911,000 fewer jobs than originally reported in the year ending in March 2025, with the biggest weakness coming from the leisure and hospitality sector, professional and business services, and retail. The report showed that job gains were tapering long before President Trump rolled out his far-reaching tariffs on US trading partners in April.

The department issues the revisions every year, intending to better account for new businesses and ones that had gone out of business. Final revisions will come out in February 2026. The updated figures came after the agency reported Friday that the economy generated just 22,000 jobs in August, well below the 80,000 economists were expecting. Also last week, the government said that US employers advertised 7.2 million job openings at the end of July, fewer than economists had forecast and the first time since April of 2021 that there were more unemployed Americans than job postings.